Customer demands DirectBuy refund following store closures

April 27, 2011 7:38:07 PM PDT

CONCORD, Calif. --

A well-known consumer buying club called DirectBuy charges thousands of dollars up front for the right to shop at its stores. But most Bay Area locations are now shut down, and it may mean driving a long way to go to a DirectBuy showroom.

The company offers factory prices for home improvement products and furnishings at showrooms across the country. But now there is only one location left in the entire Bay Area -- in Mountain View. So a woman living in Martinez says her costly membership is now almost useless.

Jan Adams had big remodeling plans for her home in Martinez, starting in her tiny kitchen.

"It was going to be changed into an L-shape and that was a pretty expensive undertaking," said Adams.

Hoping to save money, Adams bought a two-year membership to DirectBuy, a consumer club that offers members wholesale prices on home improvement products. Her membership was expensive -- $6,450 up front. However, she figured it would pay off in the end.

"The first thing I did was the oven and the cooktop," she said.

Adams saved about $250 when she replaced her oven and hood, and the membership seemed to be working, until she decided to put in new floors.

"I went to the Concord location of DirectBuy and it was closed," she said.

The showroom in her area in Concord had suddenly shut down. So she went to the next closest DirectBuy store, in Fairfield. There she was met with locked doors.

"Fairfield was just gone, like it never happened," she said.

DirectBuy in Pleasanton had closed down, too, so Adams contacted the company and was told to go to the nearest showroom. But the closest ones are 70 miles south in Mountain View or 80 miles east in Rocklin. Adams says it's way too far.

"It's 140 miles roundtrip," she said. "That's a half a day just on the road."

So she asked DirectBuy for a refund of half her membership fee since she'd used just half of her two-year term. DirectBuy refused, instead offering her home shopping through a catalog.

"They weren't providing me what I had thought I had purchased with my membership," she said.

Her contract with the North Bay franchise includes a membership guide with a guarantee that the showroom would have convenient hours, but it says nothing about what happens if the showroom shuts down. So Adams contacted 7 On Your Side and we called DirectBuy's corporate office. Weeks later, DirectBuy offered to refund Adams $2,700 -- roughly half her membership fee, but she had to sign an agreement saying she would not speak with the media or anyone about DirectBuy.

7 On Your Side told DirectBuy that Adams had already spoken with us long before the refund agreement, and in fact, facilitated the agreement it now wanted to be kept under wraps. After that, the company withdrew its refund offer and instead gave Adams the opportunity to shop from home. That wasn't OK with Adams.

"Half of my membership back, that's all I asked for," she said.

DirectBuy declined our request for an on-camera interview. A spokesman did not comment when asked whether the company withdrew the refund offer because we were airing this story.

The company said, "Despite the closing of the franchised DirectBuy location closest to her home, the same benefits previously available to Ms. Adams -- and all of our Bay area members -- are still available today. They, like Ms. Adams, have access to our state-of-the-art website as well as the ability to shop at other club locations. Ms. Adams is also receiving the added benefit of our Home Shopping service, which is normally reserved for our highest-level members and allows her to shop from the comfort of home with the help of a Home Shopping agent."

DirectBuy says other Bay Area customers in a similar situation with local stores shutting down should contact the company about their memberships. You can reach DirectBuy corporate offices by calling 800-827-6400.